Emkay Global Financial is bullish on ICICI Pru Life has recommended buy rating on the stock with a target price of Rs 750 in its research report dated July 21, 2021.
Broker Research
July 22, 2021 / 04:00 PM IST
An Edelweiss research report for Q4FY21 says road tonnage continued to improve, evident in e-way bill generation (up 6% QoQ) and improved core trucking rentals. “We estimate tonnage would increase by three–five percent for truckers. Asset-light plays Mahindra Logistics and TCI Express remain our preferred picks due to their ability to scale up/down as the environment demands,” the report said. Edelweiss is bullish on Blue Dart Express due to the pandemic-induced boom in e-commerce and its leaner cost structure. It has retained a ‘buy’ call on Mahindra Logistics, TCI Express and Blue Dart Express.
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Emkay Global Financial’s report on ICICI Pru Life
We upgrade ICICI Prudential Life Insurance (IPRU) to Buy from Hold, factoring in superior VNB growth (~29.4% yoy) and an improving product mix (protection share at ~22%). Our concerns about margins have subsided as there was a shift in product mix, aided by a diversified distribution mix, which should support the margin profile in the coming quarters. IPRU’s VNB grew ~78% yoy to Rs3.6bn in Q1FY22 while APE grew ~48% yoy to Rs12.2bn. Though the low base from last year has played a role, considering the lockdowns in Q1, this is indeed a robust performance. VNB margins surged to ~29.4% in the quarter from ~23.6% in Q4FY21 and ~24.4% in Q1FY21. Like its peers, IPRU has witnessed a surge in claims and maintains Rs5bn as provisions. ICICI Bank holds a distribution share of 28% and has seen solid demand for singlepremium policies and annuity plans. We remain curious about the difference in approach between two large private insurers [IPRU and HDFC Life] toward group protection, which we believe will unfold in due course.
Outlook
We are increasing our APE growth estimates by ~31% each for FY23 and FY24 amid the surge in demand for single-premium plans. We expect FY23/24E VNB margins at 26.6%/26.1% vs. ~24.7% earlier. We roll forward to Sep’22E with a revised TP of Rs750 (Rs506 earlier), corresponding to 2.7x P/Sep’23E EV (~2x earlier). Upgrade to Buy.
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